((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Adds cash contribution for spin-off in paragraph 2, Gilead interests in paragraph 5, shares in paragraph 8, background in paragraph 9)
Dutch pharmaceutical company Galapagos GLPG.AS said on Wednesday it plans to split into two publicly traded entities by mid-2025, creating a new company focused on innovative medicines.
Galapagos will provide around 2.45 billion euros ($2.53 billion) in cash for the new entity, which will be named at a later date, it said in a press release.
“The proposed separation is intended to help investors more easily assess the merits and future prospects of the two separate businesses, allowing them to invest in each based on their own strategy,” said Thad Huston , financial director of Galapagos.
Both companies are expected to be listed on Euronext.
The group’s U.S. partner and shareholder, Gilead Sciences GILD.O, will own about 25% of the shares in Galapagos and the new company after the split, Galapagos said.
The reorganization should lead to the elimination of around 300 positions in Europe, or around 40% of the group’s workforce, he added.
After the reorganization, the group expects a normalized annual cash outflow of between 175 and 225 million euros, excluding restructuring costs.
Galapagos shares rose 10.5% by 0806 GMT, hitting their highest level since mid-March last year.
Galapagos shares have suffered a sharp devaluation since the end of 2020, after the Dutch group decided not to pursue approval by the US Food and Drug Administration of its experimental treatment for rheumatoid arthritis. (1 dollar = 0.9678 euros)
